Acclaim for THE LEAN STARTUP

Tuning the Engine
Once the baseline has been established, the startup can work
toward the second learning milestone: tuning the engine. Every
product development, marketing, or other initiative that a startup
undertakes should be targeted at improving one of the drivers of its
growth model. For example, a company might spend time
improving the design of its product to make it easier for new
customers to use. This presupposes that the activation rate of new
customers is a driver of growth and that its baseline is lower than
the company would like. To demonstrate validated learning, the
design changes must improve the activation rate of new customers.
If they do not, the new design should be judged a failure. This is an
important rule: a good design is one that changes customer
behavior for the better.
Compare two startups. The rst company sets out with a clear
baseline metric, a hypothesis about what will improve that metric,
and a set of experiments designed to test that hypothesis. The
second team sits around debating what would improve the product,
implements several of those changes at once, and celebrates if there
is any positive increase in any of the numbers. Which startup is
more likely to be doing eective work and achieving lasting
results?
Pivot or Persevere
Over time, a team that is learning its way toward a sustainable
business will see the numbers in its model rise from the horrible
baseline established by the MVP and converge to something like the
ideal one established in the business plan. A startup that fails to do
so will see that ideal recede ever farther into the distance. When
this is done right, even the most powerful reality distortion eld
won’t be able to cover up this simple fact: if we’re not moving the
drivers of our business model, we’re not making progress. That
becomes a sure sign that it’s time to pivot.